WebTV Entering Prime Time for Growth
Four years ago, when WebTV Networks’ three co-founders started developing a system that would allow consumers to surf the Internet on their television sets, “interactive TV” was something that happened when couch potatoes threw popcorn at the set when their favorite team lost.
Today, WebTV, now a division of Microsoft Corp., is looking forward to signing up its 1 millionth subscriber. It is also losing one of its co-founders, Steve Perlman, who will leave the company in June. Co-founder Bruce Leak will take his place as president.
Leak will inherit a pioneering firm that now must differentiate itself from numerous companies jockeying to deliver interactive TV services. And WebTV’s monopoly as the only service available at retail will change next year when other set-top boxes appear in stores.
The Times talked with Leak about these challenges and his vision for WebTV:
Question: How have consumers’ reactions to your service changed since it was introduced in 1996?
Answer: The landscape [has] changed significantly during the tenure of WebTV. Initially, there were concerns about whether people wanted the Internet and whether they wanted it on their TV. Whenever we would talk about it in the early days, the concept wouldn’t go over very well. But when we showed the product to people, they realized it gave them the ability to relax in their homes with the remote control and to have more choice.
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Q. Have we reached a point at which we can leave debate behind about whether people will interact with TVs?
A. I think so. The announcement that AT&T; is planning on deploying up to 10 million set-top boxes with our technology inside makes this thing mainstream in anyone’s point of view.
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Q. Analysts expect there to be a big shakeout this year between companies scrambling to be hardware and software providers for interactive TV. Where does WebTV fit into this battle?
A. We’re the only service out there today that a customer can buy for interacting with their TV. And there’s a lot of gotchas in making it work. The consumer in their living room has different expectations than an individual in an office. When you make a product for a customer in their living room, it’s about reliability and ease of use and ease of learning. It’s not a simple problem to create a user experience that works well on the TV at a distance of 10 feet.
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Q. What will it take to increase the number of interactive TV subscribers?
A. I don’t think there’s a technological breakthrough that’s going to make a difference. It’s the kind of product people need to see to understand how it will impact their lives. One of the things that was telling to us is that after we had a really large Christmas this year, we had a big January and February. What happened was people who received the product as a gift bought it for friends and family members.
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Q. How many subscribers do you have now?
A. We have over 800,000 subscribers. We’re well on our way to hitting 1 million subscribers before the end of the year.
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Q. What are the most significant challenges WebTV faces?
A. To actually deliver on the partnerships we’ve announced recently with cable companies and with satellite TV firms and also overseas.
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Q. What are the company’s overseas plans?
A. We are currently in Canada and Japan. We recently announced technology deals with several cable companies in Europe. Our approach for international markets is very much a licensing of our technology to enable other people to operate interactive TV services.
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Q. Who are your competitors now that there are so many content and hardware providers?
A. To some degree, we see our competitors as other entertainment and information devices in the home. The thing that’s unique about WebTV is that we provide the entire experience, including the design of the technology, the service and the operation of it. We have competition in many of those spaces. The place where you will hear the most noise is the technology arena in terms of competitors who have designs for other set-top boxes.
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Q. Do you expect WebTV service to be available inside a TV set?
A. Absolutely. Our goal is to be the experience of watching 21st century TV. So wherever someone watches TV, wherever they interact with TV, we want to be the user experience. That points us in the direction of being inside both today’s analog TV and tomorrow’s digital TV and part of cable set-top boxes and satellite receivers and wherever else the TV experience is delivered.
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Times staff writer Jennifer Oldham can be reached at jennifer.oldham@latimes.com.
